Global M&A Boom Continues into 2026, Fueled by AI Demand and Portfolio Reassessments, Despite Tightening Capital

The global mergers and acquisitions (M&A) boom, which characterized 2025, is showing no signs of abating as it extends into 2026. Companies are actively reassessing their strategic portfolios and leveraging artificial intelligence (AI) to drive demand for large-scale transactions. However, a significant headwind has emerged in the form of a tightening capital pool, compelling executives to exercise unprecedented selectivity in their deal-making.

Despite an initial lull at the beginning of 2025, attributed to the imposition of sweeping tariffs by the Trump administration that briefly curtailed acquisitions and new public listings, the overall value of deal-making activity experienced a remarkable surge. According to private market intelligence firm Pitchbook, total deal value climbed nearly 40% to a record-breaking $4.9 trillion in 2025. This figure surpassed the previous record of $4.86 trillion set in 2021, with both deal count and overall value reaching historic highs. The acceleration in M&A activity was further propelled by central bank interest rate cuts, improved valuations, and a significant increase in corporate spending on artificial intelligence.

Financial markets are anticipating a continuation of this surge, with Wall Street demonstrating a renewed appetite for large-scale deals amidst the prospect of lower borrowing costs. A comprehensive survey conducted by Bain & Company, which polled 300 M&A executives, revealed that an overwhelming 80% anticipate sustained or increased deal activity throughout the current year. Key drivers cited for this optimism include improved macroeconomic conditions and a substantial backlog of private equity and venture capital assets awaiting exit opportunities.

Jake Henry, Global Co-Leader of McKinsey’s M&A Practice, observed a pivotal shift in corporate sentiment. "As abrupt shifts in trade policies settled into a pattern of less threatening change, relief turned into confidence and then a fear of missing out," Henry stated. This sentiment is echoed by insights from Goldman Sachs, whose poll of 600 corporate and financial sponsor clients indicated that 57% identify scale and strategic growth as the primary motivators for deal decisions in the current year.

Central to this transformative period is a decisive strategic imperative for companies to re-evaluate their existing portfolios. Geopolitical risks, economic fragmentation, and uneven global growth are compelling corporate boards to scrutinize their operational footprints and reassess the level of risk they are willing to undertake. Suzanne Kumar, Executive Vice President of Bain’s Global M&A and Divestiture Practice, highlighted the evolving corporate landscape. "Leaders across industries recognize that many traditional business models have reached the limits of their historical growth engines," Kumar explained. "Companies urgently need to reinvent themselves to get out ahead of the big forces of technology disruption, a post-globalization economy, and shifting profit pools," she added.

Goldman Sachs itself emerged as a dominant player in the global M&A arena, topping the rankings for the past year. The firm advised on nearly 40 deals with a total volume of $1.48 trillion, marking the strongest period for mega-deals by volume since at least 1980, according to Reuters, which cited LSEG records.

Despite the robust deal-making environment, a degree of caution persists among companies. Boston Consulting Group’s M&A sentiment index, while rebounding to 75 from its low in late 2022, still remains below the long-term average of 100. This indicates an improving, yet still cautious, market stance.

Tightest Funding Squeeze in Decades

While the appetite for M&A transactions remains strong, the availability of discretionary capital to finance these deals has reached historic lows. This scarcity is forcing executives to prioritize transactions that offer clear and demonstrable returns. According to Bain, the proportion of capital allocated to M&A hit a 30-year low in 2025, as companies channeled more of their financial resources towards dividends, share buybacks, capital expenditures, and research and development initiatives.

"Executives must pressure test whether M&A pathways and specific deals will help the company better compete in the most attractive markets… rethink portfolio boundaries, and make bigger, bolder decisions about what capabilities they must own vs. access," advised Kumar. She further emphasized, "As competing demands for capital raise the bar for deals, disciplined reinvention and value creation are essential."

The current funding crunch has significantly elevated the role of private capital in deal-making. Private equity firms are actively seeking to deploy their substantial reserves of idle cash. Borrowers are increasingly turning to private credit funds to secure greater flexibility in financing arrangements, and sovereign wealth funds are transitioning from passive backers to active lead investors in various transactions.

Private equity now accounts for approximately 40% of global M&A activity, according to Goldman Sachs. Despite some reported signs of stress within the private credit market, which is currently valued at around $2.1 trillion, Goldman Sachs forecasts that this asset class will more than double in size by 2030, thereby expanding the overall pool of capital available for large-scale transactions.

AI Capital Expenditure ‘Supercycle’

The current resurgence in M&A is being significantly propelled by blockbuster deals, with AI-related demand emerging as a primary catalyst, according to industry reports. Mega-deals valued at over $5 billion represented more than 73% of the increase in deal value recorded in 2025, as per Bain’s analysis. McKinsey’s Henry noted that the number of deals exceeding the $10 billion threshold swelled to 60 last year, the highest level observed since 2021.

"We expect more big deals in 2026, with continued consolidation and geographic expansion," Henry projected, attributing the "big-deal fever" in part to AI-related service providers. However, Brian Levy, Global Deals Industries Leader at PwC, cautioned that the substantial capital expenditures being directed towards AI could potentially constrain M&A activity in the near term.

As AI adoption accelerates, there has been a surge in demand for computing power across various sectors, including digital infrastructure, energy, semiconductors, and hardware optimization. Consequently, many companies are opting for acquisitions rather than internal development to secure necessary technology stack components. Between the first quarter of 2024 and the third quarter of 2025, U.S. hyperscalers’ capital expenditures averaged $760 million per day, according to Goldman Sachs. The investment bank estimates that by 2030, an additional 65 gigawatts of data center capacity will become operational, more than doubling the capacity added between 2019 and 2024.

"Investment in AI is being directed towards data centres, energy, and other infrastructure as well as technology development and customisation," Levy stated. He concluded, "In the near term, the scale of this multitrillion-dollar investment may divert capital and temper M&A activity."